News & Info

Legislature Changes Lien Law Requirements

Because of aggressive work done by Olympia Master Builders (OMB) and the Building Industry Association of Washington (BIAW) members during the 2007 session Legislature passed a bill to help crack down on unregistered contractors.

This newly-passed legislation is aimed directly at unregistered contractors in an attempt to give the Department of Labor & Industries (L&I) greater ability to penalize workers in the underground economy.

Current law requires all contractors to provide customers with a disclosure statement which provides information about the contractor's registration, bond and lien information. According to the new law, contractors must obtain a homeowners signature on the disclosure statement and retain a copy of the signed statement for a minimum of three years. The signed statement must be made available to the Department upon request, and failure to procure the signed disclosure statement could result in forfeiture of future lien rights.

In addition the law will also change in the following ways:

• The definition of "contractor" will be amended to include "owner builders" who build homes for immediate resale but manipulate the current law's owner exemption.
• L&I must deny an application for registration to any applicant with an unsatisfied final judgment, or any applicant who owes L&I penalties or fees.
• L&I may triple the bond requirement for any applicant for registration who has had three final judgments in the previous five years.
• L&I may obtain a warrant from superior court to authorize access to any job site at which a contractor is working.
• Penalties for working without a valid contractor registration are increased to a gross misdemeanor.

Contractors should begin making changes to disclosure statements to reflect the requirement for a homeowner's signature. For more information contact the BIAW at 360-352-7800.